LARGO — Officials have given the go-ahead for phase one of the city’s estimated $25 million project to build a new city hall complex to serve as a development catalyst to its downtown area.

City commissioners voted 7-0 on Jan. 7 to approve a $421,500 contract with ASD | SKY to perform the architectural and engineering services for phase one of the city hall project.

The city had originally set aside $150,000 for the contract, but it learned that figure was far too low.

“We determined that we need to do a lot more intensive work,” City Manager Henry Schubert said. “This is not just a city hall design project. It is a significant and complicated redevelopment project for our downtown.”

To accomplish that, the commission also voted to amend the city’s general fund budget by appropriating an additional $275,000 to fund the deal.

The 18-week phase one of the project — slated to start next week — will define and clarify the project’s scope, including developing actual project costs, Schubert said.

“We need to clearly define the proposed project so that we will have much more accuracy to the project cost as we proceed,” Schubert said. “When finished, phase one will give the city a very firm concept of what we want to construct in the downtown.”

The city will also likely need to purchase a land site where the new city hall building will be built.

“We are reviewing sites in downtown with the high probability that the city will have to purchase the property,” Schubert said.

ASD | SKY was one of six firms that submitted proposals to help the city craft its vision for a multistory, mixed-use city hall somewhere downtown.

The 57,740-square-foot facility on Highland Avenue that the city moved into in April 2000 was originally constructed as corporate offices for a financial services company, and now has issues with the heating, air-conditioning, electrical and plumbing systems.

It is also no longer big enough for the 180 employees that work there, is in a flood-prone location and couldn’t survive a strong hurricane, Schubert said.

Phase one will feature several projects, including evaluating potential sites in downtown for the building and associated parking structure. Studies must be performed to determine parking and current and future space.

The city plans to raze the existing building and parking lot and sell it for private-sector redevelopment, Schubert said. However, the adjacent city police department headquarters and emergency operations center would remain.